B08 Metal Ore Mining

Samarco dam disaster swells BHP’s exceptional items bill

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Original article by Peter Ker
The Australian Financial Review – Page: 17 : 29-Jul-16

BHP Billiton has advised that its 2015-16 financial accounts will include an additional $US1bn worth of impairment charges associated with the Samarco iron ore tailings dam disaster in Brazil. Exceptional items in the resources giant’s full-year accounts are expected to top $US7b ($A9.4bn). BHP’s Samarco joint venture partner, Vale, has also revealed significant impairment charges as a result of the disaster. Resumption of production at Samarco is now unlikely to begin until 2017.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, SAMARCO MINERACAO SA, VALE SA, SUPREME COURT OF JUSTICE (BRAZIL)

Fortescue to challenge Rio Tinto’s cost crown

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Original article by Peter Ker
The Australian Financial Review – Page: 17 & 22 : 28-Jul-16

Fortescue Metals Group’s iron ore production cost fell to $US13.10 per tonne in June 2016, and averaged $US14.31/tonne during the June quarter. Fortescue expects its C1 production costs to be within the range of $US12 to $US13/tonne in 2016-17, and the group expects its iron ore shipments to be between 165 million and 170 million tonnes for the year. Fortescue has significantly reduced its production costs in recent years, with unit costs averaging $US34.03 per tonne in 2014. Fortescue shares rose $A0.29 to $A4.41 on 27 July.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, VALE SA, MACQUARIE GROUP LIMITED – ASX MQG, UBS HOLDINGS PTY LTD

Rio Tinto staff brace for more restructuring, cutbacks

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Original article by Peter Ker
The Australian Financial Review – Page: 19 : 28-Jul-16

Rio Tinto has advised that Armando Torres will succeed Andrew Woodley as CEO of Oyu Tolgoi LLC on 1 August 2016. Rio Tinto is tipped to announce further changes throughout its business in the wake of its recent move to streamline its operations into four divisions. The group’s iron ore division is expected to be among those affected by the restructuring, particularly given the success of rival Fortescue Metals Group in reducing its production costs.

CORPORATES
RIO TINTO LIMITED – ASX RIO, OYU TOLGOI LLC, FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP

Northern Star improves dividend after annual profit climbs 65pc

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Original article by Peter Ker
The Australian Financial Review – Page: 17 : 27-Jul-16

Australian-listed Northern Star Resources has reported a 2015-16 net profit of $A151.4m, which is 65 per cent higher than previously. Most analysts had expected the gold producer to book a profit of about $A166m, while its full-year dividend of $A0.07 per share was also lower than some analysts had forecast. Northern Star Resources has also reported that its all-in sustaining cost of production was $US780 an ounce in 2015-16.

CORPORATES
NORTHERN STAR RESOURCES LIMITED – ASX NST, NEWCREST MINING LIMITED – ASX NCM, CREDIT SUISSE (AUSTRALIA) LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, DEUTSCHE BANK AG, RBC CAPITAL MARKETS

Ratings agencies demand debt before acquisitions for BHP

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Original article by Peter Ker
The Australian Financial Review – Page: 15 & 20 : 27-Jul-16

Matthew Moore of credit ratings agency Moody’s says BHP Billiton should give priority to reducing its debt rather than pursuing acquisitions. May Zhong of Standard & Poor’s agrees, arguing that BHP should allocate a significant proportion of its free discretionary cashflow over the next year to reducing debt. Zhong adds that any acquisitions should comprise commodities that it already produces. BHP is among the bidders for Anglo American’s coking coal assets in Queensland.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, MOODY’S INVESTORS SERVICE INCORPORATED, STANDARD AND POOR’S CORPORATION, ANGLO AMERICAN PLC, RIO TINTO LIMITED – ASX RIO, MITSUBISHI CORPORATION

Dividends back at Newcrest

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Original article by Barry FitzGerald
The Australian – Page: 21 : 26-Jul-16

Australian-listed Newcrest Mining produced 598,037 ounces of gold during the June 2016 quarter, compared with 636,521 ounces in the March quarter. Full-year output was at the lower end of its guidance of between 2.4 million and 2.6 million ounces. However, the group slashed its net debt by 27 per cent to $A2.1bn in 2015-16, prompting some analysts to forecast that it will pay a dividend for the first time since 2013.

CORPORATES
NEWCREST MINING LIMITED – ASX NCM, CREDIT SUISSE (AUSTRALIA) LIMITED

Miners more worried about Qld laws than global markets

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Original article by Mark Ludlow
The Australian Financial Review – Page: 6 : 25-Jul-16

A new report by the Queensland Resources Council highlights the key issues of concern for executives in the state’s mining sector. The latest "state of the sector" report shows that uncertainty regarding State Government policy and regulatory issues are the main concerns for the industry. QRC CEO Michael Roche notes that environmental regulation laws in particularly are a major concern for industry leaders.

CORPORATES
QUEENSLAND RESOURCES COUNCIL LIMITED, QUEENSLAND. DEPT OF THE PREMIER AND CABINET, BHP BILLITON LIMITED – ASX BHP, ANGLO AMERICAN PLC, QUEENSLAND NICKEL PTY LTD, AUSTRALIAN LABOR PARTY

End of Australia’s iron ore supply rush should help prices

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Original article by David Stringer
The Australian Financial Review – Page: 29 : 22-Jul-16

The iron ore price has gained about 28 per cent so far in 2016, and SRK Consulting’s Caue Araujo says it could be further boosted in the near-term as a result of lower growth in shipments by Australia’s major producers. BHP Billiton and Rio Tinto aim to eventually lift their production capacity in Western Australia to 290 million and 360 million tonnes respectively, but Macquarie Group recently suggested that neither may reach its target.

CORPORATES
SRK CONSULTING INCORPORATED, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, MORGAN STANLEY AUSTRALIA LIMITED, CITIGROUP PTY LTD, ROY HILL HOLDINGS PTY LTD, KATANA ASSET MANAGEMENT LIMITED, VALE SA, METAL BULLETIN LIMITED

US election a Trump card for gold price, says Beament

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Original article by Peter Ker
The Australian Financial Review – Page: 19 : 21-Jul-16

Northern Star Resources’ gold production totalled 558,143 ounces in 2015-16, with sales of 561,153 ounces. MD Bill Beament remains bullish about the outlook for gold, forecasting that the recent rally in the price of the precious metal will be sustained. He notes that the UK’s vote to leave the European Union has had little impact on the gold price. He expects the gold price to rise further if Donald Trump wins the US presidential election, although he did not specifically name the Republican candidate.

CORPORATES
NORTHERN STAR RESOURCES LIMITED – ASX NST, UNITED STATES. FEDERAL RESERVE BOARD, REPUBLICAN PARTY (UNITED STATES)

Fortescue unplugs lithium from battery of resources

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Original article by Barry FitzGerald
The Australian – Page: 22 : 21-Jul-16

Australian-listed Fortescue Metals Group has revealed plans to sell the lithium exploration rights at its iron ore leases in Western Australia’s Pilbara region. CEO Nev Power says iron ore remains the company’s priority. Lithium miners such as Pilbara Minerals and Orocobre have benefited from growing global demand for lithium-ion batteries, with strong gains in their share prices and market capitalisation.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, PILBARA MINERALS LIMITED – ASX PLS, OROCOBRE LIMITED – ASX ORE